What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2026-02-25 compared with 2025-02-26 · 36 added, 56 removed, 338 unchanged (21% of the section changed)

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and its domestic affiliates (collectively, “MCM”) we are a market leader in portfolio purchasing and recovery in the United States.

Through Cabot Credit Management Limited (“CCM”) and its subsidiaries and European affiliates (collectively, “Cabot”) we are one of the largest credit management services providers in Europe and the United Kingdom.

Through Cabot Credit Management Limited and its subsidiaries and European affiliates (collectively, “Cabot”) we are one of the largest credit management services providers in Europe and the United Kingdom.

These are our primary operations.

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Collections Approach related to Debt Purchasing

MCM (United States)

We continue to expand and build upon the insight gained from previous collection activities and consumer interactions when developing our account-level collection strategies for portfolios we acquire.

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Our current collection approaches consist of:

• Direct Mail and Email .

We develop innovative mail and email campaigns offering consumers payment plans, and occasionally appropriate discounts, to encourage settlement of their accounts.

• Direct Mail .

We develop innovative mail campaigns offering consumers payment plans, and occasionally appropriate discounts, to encourage settlement of their accounts.

• Call Centers .

We maintain domestic collection call centers in Phoenix, Arizona, St.

For MCM, we maintain domestic collection call centers in Phoenix, Arizona, St.

Cloud, Minnesota, Troy, Michigan, and Roanoke, Virginia and international call centers in Gurgaon, India and San Jose, Costa Rica.

For Cabot we have call centers in various locations in Europe.

Each call center generally consists of multiple collection departments.

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We continuously educate account managers to understand and apply relevant laws and policies relating to the account manager’s daily collection activities.

We have robust training and monitoring programs to help ensure compliance with applicable laws and policies by our account managers.

We have robust training and monitoring programs to help ensure our account managers are compliant with applicable laws and policies.

• Digital Collections .

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Account managers in our call centers are also encouraged to make consumers aware of our digital channels including our website.

We expect digital collections to increase as we continue to develop our digital strategies and more consumers become aware of the digital channel.

We expect digital collections to increase as we continue to enhance our digital strategies and increase consumer awareness of our digital channels.

• Legal Action .

We generally refer accounts for legal action when the consumer has not responded to our direct mail efforts or our calls and it appears the consumer is able, but unwilling, to pay their obligations.

We generally refer accounts for legal action when the consumer has not responded to our attempts to contact them and it appears the consumer is able, but unwilling, to pay their obligations.

When we decide to pursue legal action, we place the account into our internal legal channel or refer them to our network of retained law firms.

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The law firms we hire are encouraged to communicate with consumers in an attempt to collect their debts prior to initiating litigation.

We pay these law firms a contingent fee based on amounts they collect on our behalf.

Generally, we pay these law firms a contingent fee based on amounts they collect on our behalf.

• Third-Party Collection Agencies .

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Generally, we use these agencies to service specialized account segments.

We strive to use our financial resources judiciously and efficiently by not deploying resources on accounts where the prospects of collection are remote based on a consumer’s situation.

• No Resale .

Our policy is to not resell accounts to third parties in the ordinary course of business.

We expand and build upon the insight developed during our purchase process when developing our account collection strategies for portfolios we acquire.

Our proprietary consumer-level collectability analysis is the primary determinant of whether an account is actively serviced post-purchase.

Our proprietary consumer-level collectability analysis is generally the primary determinant of whether an account is actively serviced post-purchase.

The channel identification process is analogous to a decision tree where we first differentiate those consumers who we believe are unable to pay from those who we believe are able to pay.

We strive to use our financial resources judiciously and efficiently by not deploying resources on accounts where the prospects of collection are remote based on a consumer’s situation.

Consumers who we believe are financially incapable of making any payments, or are facing extenuating circumstances or hardships that would prevent them from making payments, are excluded from our collection process.

It is our practice to attempt to contact consumers and assess each consumer’s willingness to pay through analytics, phone calls, email and/or letters.

If the consumer’s contact information is unavailable or out of date, the account is routed to our skip tracing process, which includes the use of different skip tracing companies to provide accurate phone numbers and addresses.

It is our practice to attempt to contact consumers and assess each consumer’s willingness to pay.

The consumers that engage with us are presented with payment plans that are intended to suit their needs or are sometimes offered discounts on their obligations.

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We periodically refine our collection approach to determine the most effective collection strategy to pursue for each account.

Cabot (Europe)

In Europe, we also use direct mail and email, call centers, legal action, third-party collection agencies and digital methods to pursue collections.

We use insights developed during our purchasing process to build account collection strategies.

Our proprietary consumer-level collectability analysis is the primary determinant of how an account will be serviced post-purchase.

We continuously refine this analysis to determine the most effective collection strategy to pursue for each account we own.

We employ a variety of collections strategies from the point of purchase, tailored to the consumer’s financial strength.

Where contact is made and consumers indicate both a willingness and ability to pay, we create tailor-made payment plans to suit the consumer’s situation.

In doing so, we utilize UK regulatory protocols to assess affordability and ensure their plan is fair, balanced and sustainable.

Where we identify consumers with an ability to pay but who appear to be unwilling to pay their debt due, we pursue a range of collections strategies, which may include litigation processes in order to stimulate engagement and enable us to agree to a suitable plan.

Scoring is applied in conjunction with manual selection criteria to determine whether litigation might be an option, also informing any enforcement action that may be deemed most appropriate to the consumer’s situation.

Relationships with consumers are maintained through the duration of the payment plan, seeking to review plans at least annually in order to take into account fluctuations in consumers’ financial situations.

Again, scoring is used to vary the intensity of contact effort, mirroring the likelihood of a consumer’s financial situation having changed.

In the event that a consumer breaks their plan, segmentation is used to tailor the communication and contact intensity as we seek to re-engage with the consumer and understand the reason for the break.

By understanding the reason for the break we can tailor the solutions we recommend to rehabilitate the plan and put the consumer back on the path to financial recovery.

In this way, we have built strong relationships with our consumer base, reflected in exceptional customer service scores.

Our policy is to not resell accounts to third parties in the ordinary course of business.

Debt Servicing

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• Foreign Corrupt Practices Act

• Federal Communications Act

• CAN-SPAM Act

• Electronic Communications Privacy Act

The Dodd-Frank Act was adopted to reform and strengthen regulation and supervision of the U.S.

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The CFPB also has authority to obtain cease and desist orders (which can include orders for restitution or rescission of contracts, as well as other kinds of affirmative relief), costs, and monetary penalties ranging from $5,000 per day for ordinary violations of federal consumer financial laws to $25,000 per day for reckless violations and $1 million per day for knowing violations.

The CFPB has been active in its supervision of, and examination and enforcement activities related to, financial services companies generally, including bringing enforcement actions, imposing fines and mandating refunds to customers of numerous financial institutions for various practices.

The CFPB and the FTC continue to devote substantial attention to the debt collection industry, and have brought multiple investigations and enforcement actions against debt collectors for alleged violations of the FDCPA and other applicable laws.

Historically, the CFPB has been active in its supervision of, and examination and enforcement activities related to, financial services companies generally, including bringing enforcement actions, imposing fines and mandating refunds to customers of numerous financial institutions for various practices.

The CFPB and the FTC have devoted substantial attention to the debt collection industry, and have brought multiple investigations and enforcement actions against debt collectors for alleged violations of the FDCPA and other applicable laws.

Continued regulatory scrutiny by the CFPB and the FTC over debt collection practices may result in additional investigations and enforcement actions against the debt collection industry.

In September 2015, we entered into a consent order (the “2015 Consent Order”) with the CFPB in which we settled allegations arising from our practices between 2011 and 2015.

In September 2020, the CFPB filed a lawsuit alleging that we violated the 2015 Consent Order.

In the lawsuit, the CFPB alleged that we did not perfectly adhere to certain operational provisions of the 2015 Consent Order, leading to alleged violations of federal consumer financial law.

In October 2020, we entered into a stipulated judgment (“Stipulated Judgment”) with the CFPB to resolve the lawsuit.

In connection with the Stipulated Judgment, the CFPB formally terminated the 2015 Consent Order.

The Stipulated Judgment requires us to, among other things, continue to follow a narrow subset of the operational requirements contained in the 2015 Consent Order, all of which have long been part of our routine practices.

Additionally, we are subject to ancillary state Attorney General investigations related to similar debt collection practices.

We have entered into settlement agreements with the Attorneys General of certain U.S.

states in connection with our debt collection and litigation practices.

In November 2021, the CFPB issued Regulation F, which contained rules implementing the FDCPA.

Additionally, we are subject to scrutiny from state Attorneys General that likewise may result in investigations and enforcement actions in connection with our debt collection and litigation practices.

In November 2021, the CFPB’s Regulation F, which contained rules implementing the FDCPA, became effective.

Regulation F restated and clarified prohibitions on harassment and abuse, false or misleading representations, and unfair practices by debt collectors when collecting consumer debt.

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The CFPB also accepts debt collection consumer complaints, makes complaint-related data publicly available and provides template letters for consumers to use when corresponding with debt collectors.

The Dodd-Frank Act also mandates the submission of multiple studies and reports to Congress by the CFPB, and CFPB staff regularly make speeches on topics related to credit and debt.

The Dodd-Frank Act also mandates the submission of multiple studies and reports to Congress by the CFPB, and CFPB staff have made speeches on topics related to credit and debt.

All of these activities could trigger additional legislative or regulatory action.

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In addition, the FCRA requires us to treat identity theft allegations uniquely and to securely dispose of consumer credit reports.

Certain state laws impose similar or stricter privacy obligations as well as obligations to provide notification of security breaches of personal information to affected individuals, consumer reporting agencies, businesses and governmental agencies.

Certain state laws impose similar or stricter privacy obligations as well as obligations to provide notification of security breaches of personal information to affected individuals, consumer

reporting agencies, businesses and governmental agencies.

The applicable regulatory framework for privacy and cybersecurity issues is evolving and uncertain.

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Compliance with any new or developing privacy laws in the United States, including any state or federal laws, may require significant resources and subject us to a variety of regulatory and private sanctions.

In addition to the federal statutes detailed above, many states have general consumer protection statutes, laws, regulations, or court rules that apply to debt purchasing and collection.

In addition to the statutes detailed above, many states have general consumer protection statutes, laws, regulations, or court rules that apply to debt purchasing and collection.

In a number of states and cities, we must maintain licenses to perform debt collection activities and must satisfy ongoing compliance and bonding requirements.

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By way of example, Washington D.C.

passed the “Protecting Consumers

from Unjust Debt Collection Practices Amendment Act of 2021” which went into effect January 2023.

passed the “Protecting Consumers from Unjust Debt Collection Practices Amendment Act of 2021” which went into effect January 2023.

The law, among other things, requires both debt buyers and debt collectors operating in Washington D.C.

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The FCA regards debt collection as a “high risk” activity primarily due to the potential impact that poor practice can have on already vulnerable consumers and as a result maintains a focus on the sector.

The FCA Handbook sets out the FCA rules and other provis ions.

Firms wishing to carry on regulated consumer credit activities must comply with all applicable sections of the FCA Handbook, including principles to “act to deliver good outcomes for retail customers,” as well as the applicable consumer credit laws and regulations.

The FCA Handbook sets out the FCA

rules and other provis ions.

Firms wishing to carry on regulated consumer credit activities must comply with all applicable sections of the FCA Handbook, including to the Principle of “act to deliver good outcomes for retail customers,” as well as the applicable consumer credit laws and regulations.

The FCA also publishes guidance on various topics from time to time that it expects firms to comply with.

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In addition, it is likely that the compliance framework that will be needed to continue to satisfy the FCA requirements will demand continued investment and resources.

Companies authorized by the FCA must be able to demonstrate that they meet the threshold conditions for authorization and comply on an ongoing basis with the FCA’s high level standards for authorized firms, such as its Principles for Business (including the principle of “ act to deliver good outcomes for retail customers” ), and rules and guidance on systems and controls.

Companies authorized by the FCA must be able to demonstrate that they meet the threshold conditions for authorization and comply on an ongoing basis with the FCA’s high level standards for authorized firms, such as its Principles for Business, and rules and guidance on business conduct and systems and controls.

The Senior Managers and Certification Regime (“SMCR”) is designed to drive accountability and risk ownership within businesses and applies to the majority of colleagues who need to be aware of and adhere to the required standards of conduct.

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SMF Managers are subject to statements of principle and codes of practice established and enforced by the FCA.

The FCA has the ability to, among other things, impose significant fines, ban certain individuals from carrying on trade within the financial services industry, impose requirements on a firm’s permission, cease certain products from being collected upon and in extreme circumstances remove permissions to trade.

Consumer protection.

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A failure to comply with these requirements can make agreements unenforceable or can result in a requirement that charged and collected interest be repaid.

The FCA continues to review the provisions of the UK Consumer Credit Act and having up to this point prioritized changes linked to Brexit are now working with the UK Government to focus on terms that have been identified as requiring the most urgent updates.

The FCA continues to review the provisions of the UK Consumer Credit Act and is working with the UK Government to focus on terms that have been identified as requiring the most urgent updates.

Data protection.

In addition to these regulations on debt collection and debt purchase activities, Cabot must comply with the General Data Protection Regulation 2016/679 (“GDPR”) and where applicable the UK Data Protection Act 2018.

This substantially replaced the previous legislation (Data Protection Act of 1998) and introduced significant changes to the data protection regime including but not limited to:

The data protection regime under these laws and regulations include:

the conditions for obtaining consent to process personal data;

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and new supervisory authorities, including a European Data Protection Board (“EDPB”).

Data Protection Officer(s) have been appointed for the UK, Spain, France, Portugal and Ireland who are supported by Privacy Champions at each European/UK site to promote and enforce good data protection practices.

Data Protection Officer(s) have been appointed for the UK, Spain, France, Portugal and Ireland to promote and enforce good data protection practices.

In the EU, there is a new regulatory framework under Directive 2021/2167 of the European Parliament and of the Council on credit servicers and credit purchasers, known as the Non-Performing Loan (“NPL”) Directive.

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The activities of credit servicers are subject to supervision by the competent authority of the home Member State.

To date, of the markets we operate in, Ireland and France are the only EU member states to transpose the NPL Directive into local law with our Irish entity automatically being given credit servicing authorization and our French entity received authorization in 2024.

Spain and Portugal are expected to transpose the NPL Directive into local law during 2025.

To date, of the markets we operate in, Ireland, France and Portugal have transposed the NPL Directive into local law and we have received authorization in Ireland and France.

We are in the process of filing our application for authorization in Portugal.

Spain is expected to transpose the NPL Directive into local law during 2026.

In addition, the other markets in which we currently operate are subject to local laws and regulations, and we continue to review the required risk and compliance programs to facilitate compliance with applicable laws and regulations in those markets.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business